MORGANABLE BUSINESS /MARKETS
Nigeria’s foreign exchange market recorded a decline in trading activity in the latest period, with total turnover falling by 35.41 per cent to $1.70bn. The decline came after the market recorded a strong rebound in the previous week.
Akure —
Nigeria’s foreign exchange market recorded a decline in trading activity in the latest period, with total turnover falling by 35.41 per cent to $1.70bn. The decline came after the market recorded a strong rebound in the previous week.
Data from the FMDQ FX Market Analysis Report showed that total turnover across the Spot and Derivatives markets fell by $930.18m. The figure dropped from $2.63bn in the week ended September 25 to $1.70bn in the week ended October 2, 2026.
The latest decline highlights the changing pace of activity in Nigeria’s foreign exchange market. It also shows how trading volumes can shift quickly as market participants respond to liquidity conditions, currency demand and broader economic developments.
According to the report, average daily turnover across the two market segments declined to $424.24m during the latest week. That compares with $525.43m recorded in the preceding week.
The spot market drove most of the decline. Spot transactions fell by 36.93 per cent, representing a reduction of $955.70m. As a result, spot turnover dropped from $2.59bn in the previous week to $1.63bn in the latest period.
Spot transactions remained the dominant part of the market, however. They accounted for 96.19 per cent of total FX turnover during the week. Their average daily value also fell from $517.59m to $408.06m.
The decline in spot activity is significant because spot transactions cover immediate foreign exchange needs. Businesses and other market participants use the segment for obligations linked to imports, payments, corporate activities and other transactions that require prompt access to foreign currency.
However, the fall in overall turnover did not affect every part of the market. The FX Derivatives segment recorded a strong increase during the same period.
Derivatives turnover rose by 65.09 per cent, gaining $25.52m to reach $64.73m. This was up from $39.21m recorded during the week ended September 25.
The increase came entirely from FX Forwards turnover. Consequently, derivatives increased their share of total market activity from 1.49 per cent in the previous week to 3.81 per cent in the latest reporting period.
Average daily derivatives turnover also more than doubled. It increased to $16.18m from $7.84m in the preceding week, showing stronger demand for forward transactions despite the broader decline in FX activity.
The rise in forward trading may point to greater attention to currency risk among market participants. Businesses that expect future foreign currency payments can use forward contracts to lock in exchange rates and reduce uncertainty around future obligations.
Therefore, the contrasting performance of the spot and derivatives markets offers an important picture of current FX conditions. While immediate currency transactions weakened sharply, demand for instruments that help manage future currency exposure increased.
The latest figures also follow a strong rise in FX market activity during the previous week. FMDQ data showed that total turnover had climbed 11.02 per cent to $2.63bn in the week ended September 25. That increase followed a much sharper contraction in the preceding period.
The movement shows that Nigeria’s FX market remains sensitive to changes in trading conditions. Weekly turnover can rise or fall significantly depending on the timing of transactions, liquidity availability and the needs of institutional participants.
Meanwhile, the naira has shown relative stability around the official market in recent sessions. CBN data reported the currency at about N1,332 per dollar at the official market on October 2, after it traded around N1,329.50 on September 30. The parallel market also recorded a narrower gap at that point.
The stability of the naira does not necessarily mean that FX market activity will remain constant. Exchange rates and market turnover measure different aspects of the market. A relatively stable currency can still experience changes in trading volume as buyers and sellers adjust their positions.
For businesses, the latest turnover figures remain important. Lower spot activity could reflect reduced immediate demand during the week, while stronger forward activity suggests that some participants are paying greater attention to future currency requirements.
Importers, manufacturers and companies with foreign obligations continue to monitor these developments closely. Changes in FX liquidity can affect the cost and timing of international payments. As a result, businesses often adjust their currency strategies when market conditions change.
Investors are also watching the direction of Nigeria’s FX reforms and liquidity conditions. The Central Bank of Nigeria has continued efforts to improve transparency and strengthen the functioning of the foreign exchange market. These reforms remain important for businesses seeking greater certainty when planning transactions.
At the same time, the latest figures show why market participants must look beyond a single weekly number. The 35.41 per cent decline appears substantial, but the previous week recorded an 11.02 per cent increase. This pattern suggests that weekly movements can be volatile.
Moreover, the stronger performance of FX forwards provides another layer to the latest data. While spot trading declined, derivatives activity expanded. That shift could indicate growing use of risk-management tools as companies and financial institutions prepare for possible changes in exchange rates.
Going forward, market participants will watch whether the decline in spot turnover continues or proves temporary. They will also monitor whether the growth in derivatives trading gains further momentum in the coming weeks.
Ultimately, the latest FMDQ figures underline the fluid nature of Nigeria’s foreign exchange market. Total turnover fell sharply to $1.70bn, driven mainly by weaker spot transactions. Yet, FX forwards moved in the opposite direction, rising to $64.73m.
The figures therefore present a mixed picture. Immediate FX trading slowed considerably, but demand for instruments designed to manage future currency risks strengthened.
As Nigeria’s businesses and investors continue to navigate changing economic conditions, both trends will remain important indicators of the country’s evolving foreign exchange market.
